Technical Highlights

The stock entered into a deep consolidation mode after reaching its 52-week high. A falling triangle pattern was formed as the stock consolidated within the range. Upon reaching its trough, the stock started to rebound strongly as buying interest returned. Two weeks ago, the stock broke out of the falling triangle pattern, and since then, it has been trading in a pattern of higher highs and higher lows, surpassing the key resistance level at RM0.345. This suggests that a trend reversal is likely underway.

Momentum indicators are favourable of the trend reversal. The RSI is rebounding, indicating sustained trading interest. Meanwhile, the recent exhibition of a golden cross in MACD further ascertains the short-term bullish momentum in the stock.

An ideal entry point can be seen in the range of RM0.345 to RM0.360. The first resistance lies at RM0.415, and a breakthrough here could lead the stock to test the subsequent resistance at RM0.445. Conversely, a dip below RM0.300 could indicate the start of a correction phase.

Entry - RM0.345 - RM0.360

Stop Loss - RM0.285

Target Price - RM0.415 - RM0.445

Source: Mercury Securities Research - 9 Dec 2024